Never use round numbers
Proposal or estimate quotes
One of the problems with using round numbers, is they always look made up – an approximation, estimated even. And this undermines your position. Whenever a proposal or estimate quotes a round number, there is an assumption it will have been rounded up and indeed quite possibly made up too!
My advice is to work out your numbers, be that to illustrate your experience or whenever quoting a price. For instance, rather than state you have worked with over 200 clients, why not say ‘at the time of going to press, we have dealt with in excess of 205 clients’.
Whenever quoting a price, doesn’t £1,967.00 sound better than £1,900? The tiny increase will not put prospects off, especially if you have articulated your offer well. It reads better and increases your margin too!
Nothing new here, as one of my all time favourite business books called Parkinson’s Law Wikipedia made exactly the same point! And would you believe the book was published in the 1950’s and nothings changed since then.
I made a short video to illustrate the point: Why Round Numbers Don’t Work
It’s strange to consider that we all know pricing is absolutely crucial within every business, and yet it’s often a real struggle to set prices. It can feel a guessing game or one dictated by others.
The cost of sales
In theory it should be easy. Establish what it will cost you to deliver your product or service – the cost of sales. Calculate your overheads. Work out what margin you need, the profit you need to make. It’s also worth seeing what the competition is charging.
However we all know it’s not that easy – ultimately your customers will decide! So your job is to help them and never use round numbers is a good starting point!
Increase prices whenever possible
One of the most important lessons I have learnt over the years, is that you should always look too increase prices whenever possible. A key way to achieve this is make sure you very clearly explain all the benefits your product or service will provide – focus on the benefits not features. Use social proof. A guarantee will offer reassurance.
These and other Business Boosters are at the core of the Business Growth Club system, and they make a real difference! The modules are freely available and were written just for the small business sector Find them here